Collective Bargaining Agreement

AGREEMENT


AGREEMENT dated May 1, 1998 between GENEVA STEEL (the "Company") and UNITED STEELWORKERS OF AMERICA, on behalf of Local Union 2701 hereinafter referred to as the "Union", providing for industrial relations at the Company's Geneva, Utah steel operations (the "Geneva Plant") and certain other matters as set forth herein.


ARTICLE 1


APPLICATION OF AGREEMENT


SECTION 1 -- PURPOSE AND INTENT OF THE PARTIES.


A. Matters of Employment: It is the intent and purpose of the parties hereto to set forth herein the agreement between them in respect to rates of pay, hours of work, and other conditions of employment in the Geneva Plant and certain other matters as set forth herein.


B. Basis of Claims: The provisions of this Agreement constitute the sole procedure for the processing and settlement of any claim by an employee (as defined below) or the Union of the violation by the Company of this Agreement. As the representative of the employees, the Union may except as provided in Article 16, Section 4.C. initiate and process grievances through the grievance procedure, including arbitration, in accordance with this Agreement, or adjust or settle the same.


C. Administration: The representatives of the Company and the Union shall continue to provide each other with such advance notice as is reasonable under the circumstances on all matters of importance in the administration of the terms of the Agreement, including changes or innovations affecting relations between the parties.


D. Nondiscrimination: It is and shall be the policy of the Company and the Union that the provisions of this Agreement shall be applied to all employees and applicants without regard to race, color, religious creed, national origin, sex, age, disability, Veteran or special disable Veteran status, or membership in the Union.


SECTION 2 -- UNIT COVERAGE.


A. Membership: The bargaining unit at the Geneva Plant, and the term "employee(s)" as used herein, shall include all production, maintenance, pipe mill, quarry and certain salaried clerical and technical employees of the Company for whom the Union is currently certified by the National Labor Relations Board as the exclusive collective-bargaining representative, and shall exclude all executives, office employees, managers, division managers, area managers, foremen, shift managers, supervisors, draftsmen, timekeepers, watchmen and guards, full-time first-aid and safety employees, and all similar or other jobs not currently included in the bargaining unit. The


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term "Geneva Plant" shall not include the 40" blooming mill, and the structural mill which have been shut down.


B. Dispute of Coverage: Any difference which shall arise between the Company and the Union as to whether or not an individual employee is or is not included within the bargaining unit shall be handled as a grievance in accordance with the procedures set forth in Article 16 hereof.


SECTION 3 -- CONTRACTING OUT


The parties recognize the seriousness of the problems associated with contracting out of work both inside and outside the Plant and have accordingly agreed as follows:


The Parties have existing rights and contractual understandings with respect to contracting out. In addition, the following provisions shall be applicable to all contracting out issues subject to, and arising on or after the effective date of this Agreement.


A. Basic Prohibition: In determining whether work should be contracted out or accomplished by the bargaining unit, the guiding principle is that work capable of being performed by Bargaining Unit employees shall be performed by such employees. Accordingly, the Company will not contract out any work for performance inside or outside the Plant unless it demonstrates that such work meets one of the following exceptions:


B. Exceptions:


1. Work in the Plant


a. Production, service, all maintenance and repair work, all
installation, replacement and reconstruction of equipment
and productive facilities, other than that listed in
Subparagraph B1.b. below, all within a Plant, may be
contracted out if (i) the consistent practice has been to
have such work performed by employees of contractors and
(ii) it is more reasonable (within the meaning of
paragraph C below) for the Company to contract out such
work than to use its own employees.


b. Major new construction including major installation, major
replacement and major reconstruction of equipment and
productive facilities, at the Plant may be contracted out.
A project shall be deemed major so as to fall within the
scope of this exception if it is shown by the Company that
the project is of a grander or larger scale when compared
to other projects bargaining unit forces at the Plant are
normally expected to do. Such comparison should be made in
light of all relevant factors. However, in making such
comparison, there shall be no bundling of historically
distinct


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projects into single projects of major new construction
(including major installation, major replacement and major
reconstruction of equipment and production facilities) nor
any compression of historically distinct projects into a
continuous time period.


As regards the term "new construction" above, except for
work done on equipment or systems pursuant to a
manufacturer's warranty, work that is of a peripheral
nature to major new construction, including major
installation, major replacement and major reconstruction
of equipment and production facilities and which does not
concern the main body of work shall be assigned to
employees within the bargaining unit unless it is more
reasonable to contract out such work taking into
consideration the factors set forth in Paragraph C or it
is otherwise mutually agreed. For purposes of this
provision, the term "work of a peripheral nature" may in
certain instances include, but not be limited to
demolition, site preparation, road building, utility
hook-ups, pipe lines and any work which is not integral to
the main body.


2. Work Outside the Plant


a. Should the Company contend that maintenance or repair work
to be performed outside the Plant or work associated with
the fabricating of goods, materials or equipment purchased
or leased from a vendor or supplier should be excepted
from the prohibitions of this Section, the Company must
demonstrate that it is more reasonable (within the meaning
of paragraph C below) for the Company to contract for such
work (including the purchase or lease of the item) than to
use its own employees to perform the work or to fabricate
the item.


Notwithstanding the above, the Company may purchase
standard components or parts or supply items, produced for
sale generally ("shelf items"). No items shall be deemed a
standard component or part or supply item if (i) its
fabrication requires the use of prints, sketches or
manufacturing instructions supplied by the Company or at
its behest or it is otherwise made according to Company
specifications or (ii) it involves the purchase of motors,
transmissions, convertors or other items under a core
exchange, replacement or trade-in transaction (whether or
not title to the unit passes to the vendor/purchaser as
part of the transaction).


b. Production work may be performed outside the Plant only
where the Company demonstrates that it is unable because
of lack of capital to invest in necessary equipment or
facilities, and that it has a continuing


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commitment to the steelmaking business. In determining
whether there is capital to invest in particular equipment
or facilities, the Company is entitled to make reasonable
judgments about the allocation of scarce capital resources
among its Plants represented by the Union and their
supporting facilities.


3. Mutual Agreement


Work contracted out by mutual agreement of the parties pursuant
to Paragraph G below.


C. Reasonableness: In determining whether it is more reasonable for the Company to contract out work, rather than use its own employees, the following factors shall be considered:


1. Whether the bargaining unit will be adversely impacted.


2. The necessity for hiring new employees shall not be deemed a
negative factor except for work of a temporary nature.


3. Desirability of recalling employees on layoff.


4. Availability of qualified employees (whether active or on layoff)
for a duration long enough to complete the work.


5. Availability of adequate qualified supervision.


6. Availability of required equipment either on hand or by lease or
purchase, provided that either the capital outlay for the
purchase of such equipment, or the expense of leasing such
equipment, is not an unreasonable expenditure in all the
circumstances at the time the proposed decision is made.


7. The expected duration of the work and the time constraints
associated with the work.


8. Whether the decision to contract out the work is made to avoid
any obligation under the collective bargaining agreement or
benefits agreements associated therewith.


9. Whether the work is covered by a warranty necessary to protect
the Company's investment. For purposes of this subparagraph,
warranties are intended to include work performed for the limited
time necessary to make effective the following seller guarantees:


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a. Manufacturer guarantees that new or rehabilitated
equipment or systems are free of errors in quality,
workmanship or design.


b. Manufacturer guarantees that new or rehabilitated
equipment or systems will perform at stated levels of
performance and or efficiency subsequent to installation.


Warranties are commitments associated with a particular
product or service in order to assure that seller
representations will be honored at no additional cost to
the Company. Long term service contracts are not
warranties for the purposes of this subparagraph.


10. In the case of work associated with leased equipment, whether
such equipment is available without a commitment to use the
employees of outside contractors or lessors for its operation and
maintenance.


11. Whether, in connection with the subject work or generally, the
Local Union is willing to waive or has waived restrictive working
conditions, practices or jurisdictional rules (all within the
meaning of "local working conditions" and the authority provided
by this Agreement).


D. Contracting Out Committee:


1. A regularly constituted committee consisting of not more
than four persons (except that the committee may be
enlarged to six persons by local agreement), half of whom
shall be members of the bargaining unit and designated by
the Union in writing to the Management, shall attempt to
resolve problems in connection with the operation,
application and administration of the foregoing
provisions.


2. In addition to the requirements of Paragraph E below, such
committee may discuss any other current problems with
respect to contracting out brought to the attention of the
committee.


3. Such committee shall meet at least one time each month.


E. Notice and Information: Before the Company finally decides to contract out an item of work as to which it claims the right to contract out, the Union committee members will be notified. Except as provided in Paragraph J below (Shelf Item Procedure) such notice will be given in sufficient time to permit the Union to invoke the Expedited Procedure described in Paragraph H below, unless emergency situations prevent it. Such notice shall be in writing and shall be sufficient to advise the Union members of the committee of the location, type, scope, duration and timetable of the work to be performed so that the Union members of the committee


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can adequately form an opinion as to the reasons for such contracting out. Such notice shall generally contain the information set forth below:


1. Location of work.


2. Type of work:


a. Service
b. Maintenance
c. Major Rebuilds
d. New Construction


3. Detailed description of the work.


4. Crafts or occupations involved.


5. Estimated duration of work.


6. Anticipated utilization of bargaining unit forces during the
period.


7. Effect on operations of work not completed in timely fashion.


Within ninety (90) days following the effective date of this agreement, representatives of the parties shall develop a form notice for the submission of the information described above. Either the Union members of the committee or the Company members of the committee may convene a prompt meeting of the committee. Should the Union committee members believe a meeting to be necessary, they shall so request the Company members in writing within five (5) days (excluding Saturdays, Sundays and holidays) after receipt of such notice and such a meeting shall be held within three (3) days (excluding Saturdays, Sundays and holidays) thereafter. The Union members of the committee may include in the meeting the Union representative from the area in which the problem arises. At such meeting, the parties should review in detail the plans for the work to be performed and the reasons for contracting out such work. Upon their request, the Union members of the committee will be provided any and all relevant information in the Company's possession relating to the reasonableness factors set forth in Paragraph C above. Included among the information to be made available to the committee shall be the opportunity to review copies of any relevant proposed contracts with the outside contractor. This information will be kept confidential. The Company members of the committee shall give full consideration to any comments or suggestions by the Union members of the committee and to any alternative plans proposed by Union members for the performance of the work by bargaining unit personnel. Except in emergency situations, such discussions, if requested shall take place before any final decision is made as to whether or not such work will be contracted out.


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Should the Company committee members fail to give notice as provided above, then not later than thirty (30) days from the date of the commencement of the work a grievance relating to such matter may be filed under the complaint and grievance procedure. Should it be found in the arbitration of a grievance alleging a failure of the Company to provide the notice or information required under this Paragraph E that such notice or information was not provided, that the failure was not due to any emergency requirement, and that such failure deprived the Union of a reasonable opportunity to suggest and discuss practicable alternatives to contracting out, the Arbitrator shall have the authority to fashion a remedy, at his discretion, that he deems appropriate to the circumstances of the particular case. Such remedy, if afforded, may include earnings and benefits to grievants who would have performed the work, if they can be reasonably identified.


F. Remedy for Repeated Notice Violations: Notwithstanding any other provision of this Agreement, where, at a particular Plant, it is found that the Company (i) committed violations of Paragraph E that demonstrate willful conduct in violation of the notice provision or constitutes a pattern of conduct of repeated violations or (ii) violated a cease and desist order previously issued by an Arbitrator in connection with a violation of paragraph E the Arbitrator may, as circumstances warrant, fashion a suitable remedy or penalty.


G. Mutual Agreement and Disputes: The committee may resolve the matter by mutually agreeing that the work in question either shall or shall not be contracted out. Any such resolution shall be final and binding but only as to the matter under consideration and shall not affect future determinations under this Section.


If the matter is not resolved, or if no discussion is held, the dispute may be processed further (i) by filing a grievance relating to such matter under the complaint and grievance procedure described in the Labor Agreement; or (ii) by submitting the matter to the Expedited Procedure set out in Paragraph H below.


H. Expedited Procedure: In the event that either the Union or Company members of the committee request an expedited resolution of any dispute arising under this Section, except Paragraph J (Shelf Item Procedure), it shall be submitted to the Expedited Procedure in accordance with the following:


1. In all cases except those involving day-to-day maintenance and
repair work and service, and emergency situations, the Expedited
Procedure shall be implemented prior to letting a binding
contract.


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2. Within three (3) days (excluding Saturdays, Sundays and holidays)
after either the Union or Company members of the committee
determine that the committee cannot resolve the dispute, either
party (Chairman of the Grievance Committee in the case of the
Local Union and the Manager of Labor Relations in the case of the
Company) may advise the other in writing that it is invoking this
Expedited Procedure.


3. An expedited arbitration must be scheduled within three (3) days
(excluding Saturdays, Sundays and holidays) of such notice and
heard at a hearing commencing within five (5) days (excluding
Saturdays, Sundays and holidays) thereafter. The arbitrator
selected from the Arbitration Panel shall hear the dispute and,
if the arbitrator selected is not available to hear the dispute
within five (5) days, another arbitrator shall be selected from
the Arbitration Panel.


4. The arbitrator must render a decision within forty-eight (48)
hours (excluding Saturdays, Sundays and holidays) of the
conclusion of the hearing. Such decision may be cited as a
precedent by either party in any future contracting out disputes.


5. Notwithstanding any other provision of this Agreement, any case
heard in the Expedited Procedure before the work in dispute was
performed may be reopened by the Union in accordance with this
paragraph if such work, as actually performed, varied in any
substantial respect from the description presented in
arbitration, except where the difference involved a good faith
variance as to the magnitude of the project. The request to
reopen the case must be submitted within seven (7) days of the
date on which the Union knew or should have known of the
variance and shall contain a summary of the ways in which the
work as actually performed differed from the description
presented in arbitration. As soon as practicable after receipt
of a request to reopen, an arbitration hearing date shall be
scheduled. In a case reopened pursuant to this paragraph, the
Arbitrator shall determine whether the work in dispute, as it
actually was performed, violated the contracting out provisions
and, if so, the remedy. The prior decision regarding the subject
work shall be considered in the determination and given weight
in the subsequent dispute, except to the extent that it relied
on an erroneous description.


I. Contractors Testifying in Arbitration: No testimony offered by an outside contractor may be considered in any proceeding alleging a violation of these provisions unless the party calling the contractor provides the other party with a copy of each contractor document to be offered at least forty-eight (48) hours (excluding Saturdays, Sundays and holidays) before commencement of that hearing.


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J. Shelf Item Procedure:


1. No later than July 1, 1998, and, except as provided herein,
annually thereafter, the Company shall provide the Union members
of the committee with a list and description of anticipated
ongoing purchases of each item which the Company claims to be a
shelf item within the meaning of Paragraph B (2) a above. If the
Union members of the committee so request, the list shall not
include any item included on a previous list where the status of
the items, as of that time, has been expressly resolved. Within
sixty (60) days of the submission of the list, either the Union
members of the committee or the Company members may convene a
prompt meeting of the committee to discuss and review the list
of items and, if requested, the facts underlying the Company's
claim that such items are shelf items.


2. The committee may resolve the matter by mutually agreeing that
the item in question either is or is not a shelf item. With
respect to any item as to which the Union members of the
committee agree with the Company's claim that it is a shelf item,
the Company shall be relieved of any obligation to furnish a
contracting out notice until the June 1 next following such
agreement and thereafter, if the Union has requested that a
resolved item be deleted from the shelf item list in accordance
with Paragraph J (1).


3. If the matter is not resolved, any dispute may be processed
further by filing, within thirty (30) days of the date of the
last discussion, a grievance in Step Three (3) of the complaint
and grievance procedures as described in the labor agreement.
Except as provided in Paragraph J (5) such a grievance shall
include all items in dispute. However, where a number of items
raise the same or similar issues, those items may be grouped in a
single class or category.


4. An item which the Company claims to be a shelf item, but which
was not included on the list referred to above because no
purchase was anticipated, shall be listed and described on a
contracting out notice provided to the Union not later than the
regularly scheduled meeting of the contracting out committee next
following purchase of the item. Thereafter, the parties shall
follow the procedures set forth in paragraphs (2) and (3) above.


5. The Union may file a grievance in accordance with Paragraph G or
H of these provisions with respect to any unresolved item of
maintenance, repair work or work associated with the fabrication
of goods, material or equipment performed outside the Plant
notwithstanding the inclusion of such item on the shelf item list
previously furnished to the Union by the Company, provided such
grievance is filed within thirty (30) days of the date on which
the Union knew or should have known of the performance of the
work.


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K. Annual Review: Commencing on or before September 1, 1998 and on or before September 1 of each year thereafter the Company committee members shall meet with the Union committee members for the purpose of (i) reviewing all work whether inside or outside the Plant which the Company anticipates may be performed by outside contractors or vendors at some time during the following Twelve (12) months, (ii) determining such work which should be performed by Bargaining Unit employees and (iii) identifying situations where the elimination of restrictive practices would promote the performance of any such work by Bargaining Unit employees. The Union committee members shall be entitled in conducting this study to review any current or proposed contracts concerning items of work performed for the Company by outside contractors and vendors and shall keep such information confidential. By no later than November 1, 199 ...